Treasurer's Books Off By Millions, Audit Finds

Pappas Puts Blame On Rosewell Office

September 14, 1999|By Robert Becker, Tribune Staff Writer.

The accounting nightmare besetting the Cook County treasurer's office took another strange twist Monday as officials revealed a $129 million bookkeeping snafu and debated whether it could end up costing millions of dollars to schools, park districts, and municipalities.

County Treasurer Maria Pappas said auditors have found that from 1992 through 1998 the office, under her predecessor Edward J. Rosewell, effectively overpaid taxing bodies by failing to charge them for the costs of tax refunds issued to property owners.

Aides to Pappas said Rosewell essentially used incoming property tax receipts to pay off refunds owed from prior years. For reasons that auditors are still struggling to understand, Rosewell never sought reimbursement for the refunds from the taxing bodies.

Pappas said the $129 million gaffe surfaced as analysts from Arthur Andersen & Co., which she hired soon after taking office last December, have attempted to sift through the accounting rubble left by Rosewell, who died in July less than a year after pleading guilty to hiring ghost payrollers.

The implications of the Andersen findings remain unclear.

Pappas said it would not be her decision whether or not to pursue reimbursement from the hundreds of taxing bodies that potentially owe money to her office, which processes $7 billion a year in property tax receipts and then distributes the funds to public agencies throughout the county.

"The County Board has to make a decision and the state's attorney has to make a decision," Pappas said. "I'm not asking anybody for anything.'

But Catherine Maras, the county's chief information officer, predicted that taxing bodies won't feel the bite--ironically because of other recently discovered accounting miscues linked to Rosewell's tenure. For example, auditors have identified a pot of $36 million of property tax revenue from 1986 that was never distributed to taxing bodies.

"We don't think there is going to be any impact," said Maras. "We don't foresee any major impact on anybody."

Maras said her office is running a computer program for Pappas aimed at estimating any potential impact of the accounting problems on taxing bodies. Maras said the results of that computer simulation would be ready next week.

Pappas seemed surprised that Maras' office downplayed the potential impact of the problem on local governments which rely on property tax revenue to fund operations.

"I hope they're right," Pappas said.

Pappas has used recent disclosures of mismanagement by Rosewell to bolster her campaign to modernize her office.

Pappas, who only last week requested funds from the County Board for additional audit help, said she would need five years and as much as $25 million to fully overhaul the treasurer's office.

Rosewell, who served six terms as treasurer, pleaded guilty to placing two state legislators in high-paying, do-nothing jobs.

Authorities charged that Rosewell, who died in July after a long illness, placed the two legislators in ghost jobs as a favor to two powerful Democratic politicians.

Pappas has complained loudly about problems she says she inherited from Rosewell. Her first day on the job last December, Pappas told reporters that she and her staff had discovered $31 million in checks received by the office in the previous month that had not been deposited in a bank.